COFCO secures 25-year lease on Santos terminal

WORLD: Rising crude oil prices due to the ongoing conflict in Ukraine are driving up ocean freight rates and US barge prices, according to data by the US Department of Agriculture (USDA) reported by World Grain on 18 March.

At the time of the USDA’s 17 March Grain Transportation Report, ocean freight rates for shipping bulk grains had risen for five consecutive weeks and, as of 10 March, the rate for shipping a tonne of grain from the US Gulf to Japan was US$79/tonne, a 12% increase from the start of this year, 37% more than a year ago, and 70% higher than the four-year average.

The rate from the Pacific Northwest to Japan was US$44.25/tonne, a 14% increase from the start of the year, 36% more than last year and 72% more than the four-year average, according to the report

The US to Europe rate was US$29.50/tonne, up 12% from the start of the year, 39% more than a year ago and 75% higher than the four-year average.

The rate hike was driven by rising crude oil prices caused by the conflict in Ukraine following Russia’s invasion of the country on 24 February, according to the Transportation and Export Report by O’Neil Commodity Consulting.

China’s largest food processor and manufacturer COFCO announced on 30 March that its Brazilian branch had secured a 25-year lease for a new bulk terminal in the Port of Santos.

Due to be operational in 2025/2026, the STS11 terminal will expand COFCO International Brasil’s port capacity in Brazil to 14M tonnes and help expand exports from the country, according to the company. As part of the agreement, the Brazilian branch would invest in the modernisation and expansion of the terminal facilities.

“The investment will provide farmers with more choices and create new opportunities for COFCO International Brasil SA to cooperate with local industry partners and logistics companies,” the company said.

COFCO – which sources, stores, processes and exports grains and oilseeds worldwide – said 60% of its grains and oilseeds originated in South America. It has facilities for storage in Brazil, Argentina, Uruguay and Paraguay; barge-loading in Paraguay; and export at Rosario port in Argentina and Santos port in Brazil. COFCO said its Brazilian branch sourced agriculture commodities from more than 7,000 farmers.

The Port of Santos in São Paulo state, is one of the largest and busiest ports in Latin America and is a key export port for Brazilian soyabeans.

Leading US agribusiness cooperative Ag Processing Inc (AGP) will be carrying out a major expansion and upgrade of its export facilities at the Port of Grays Harbour (POGH) in Aberdeen, Washington.

Current facilities at deepwater berths Terminal 2 and POGH’s Terminal 4 would be upgraded, AGP said on 22 March. Additional storage would also be built at Terminal 2 and a new ship loader installed at Terminal 4.

AGP said the upgraded facililties – due to become operational in 2025 subject to regulatory approval – would enable it to load multiple ships up to, and including, Panamax-sized vessels.

“With the expansion in US soyabean crush capacity driven by the demand for renewable diesel feedstock, soyabean meal production in the USA will outpace historical increases in domestic usage,” AGP CEO Chris Schaffer said.

“AGP’s western US processing locations fit well to supply additional protein to the growing Southeast Asian and Asian markets. The USA currently provides less than 20% of overall Southeast Asian soya meal demand.”

AGP says its expansion will allow it to load Panamax-sized vessels

National Grain Company, a joint venture between the Saudi Agricultural and Livestock Investment Co (SALIC) and Saudi shipper Bahri, has signed an agreement to build a grains terminal in Saudi Arabia’s Yanbu Commercial Port.

The 156,000 tonnes terminal would handle, store and distribute up to 3M tonnes/ year of grains, including barley, corn and soyabeans, SALIC said on 23 March.

The first phase of the project would include 12 silos with 96,000 tonnes of capacity and a flat warehouse with 60,000 tonnes of capacity.

Other features would include a 650m conveyor belt, unloading equipment with 800 tonnes/hour discharge capacity, and a dedicated area for loading trucks and packaging.

HAIF Trading & Construction had been appointed to build the grain terminal.

Saudi Arabia’s minister of environment, water and agriculture and SALIC chairman Abdulrahman Abdulmohsen Al-Fadley said the terminal would be the first regional centre for grains in Yanbu Commercial Port.

The aim of the new terminal was to accelerate the origination and discharge of grains to Saudi Arabia and enhance supply chain capabilities, he said.

SALIC was established in 2009 to secure food supplies for Saudi Arabia through mass production and investments. The National Grains Company was formed in August 2020 to contribute to achieving a food security strategy.